Estimate the constant annual compounding growth rate

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Reference no: EM132063851

Question

Year	Dividend per share	Number of shares	Share price, end of year
2001	0.21	4,125,000	21.00
2002	0.25	4,000,000	20.50
2003	0.27	3,800,000	22.00
2004	0.32	3,800,000	21.80
2005	0.37	3,750,000	22.30

Part A. Estimate the constant annual compounding growth rate based on the dividends 2001 through 2005.

Anticipated dividend growth rate:

Part B. Use the Gordon dividend model to estimate the cost of equity

Gordon model cost of equity, rE:

Reference no: EM132063851

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